There is no correlation between the percentage of net revenue spent on R&D and the innovative capabilities of an organization—none. That’s not to say that R&D capacity isn’t important, but at the end of the day, innovation is generated by new ideas, not by messing around in the lab
– Bart Becht – CEO ,Reckitt Benckiser
Today, 15 “power brands”—Air Wick air freshener, Finish and Calgonit automatic dishwashing detergent, and Lysol disinfectant among them—account for more than half of the company’s net revenues. What’s more, 40 percent of total sales are from products launched within the past three years—products like Vanish Oxi Action stain-removing gel, Cillit Bang lime and grime cleaner, and Air Wick Freshmatic automatic air freshener.
Affluent consumers in a hurry will pay a premium for product innovations like these, and Reckitt Benckiser churns them out at a rate of more than 100 a year, despite a significantly smaller R&D budget than its peers (about 1.5 percent of net revenues, or £60 million). Plainly, the company’s success in picking winning products hinges on its knack for developing consumer insights.
From consumers, from suppliers, from creative shops. In fact, everybody in this organization is there to generate ideas as well and to bring them to the table. The more ideas I have, the better my chances of finding a winner.
I like to compare innovation to baseball. People think that it’s about hitting home runs—it’s not. Innovation is about getting many base hits and occasionally hitting the home run. You very rarely win a baseball game just by hitting home runs. And the objective is to win the game.
– Bart Becht – CEO ,Reckitt Benckiser
Today, 15 “power brands”—Air Wick air freshener, Finish and Calgonit automatic dishwashing detergent, and Lysol disinfectant among them—account for more than half of the company’s net revenues. What’s more, 40 percent of total sales are from products launched within the past three years—products like Vanish Oxi Action stain-removing gel, Cillit Bang lime and grime cleaner, and Air Wick Freshmatic automatic air freshener.
Affluent consumers in a hurry will pay a premium for product innovations like these, and Reckitt Benckiser churns them out at a rate of more than 100 a year, despite a significantly smaller R&D budget than its peers (about 1.5 percent of net revenues, or £60 million). Plainly, the company’s success in picking winning products hinges on its knack for developing consumer insights.
From consumers, from suppliers, from creative shops. In fact, everybody in this organization is there to generate ideas as well and to bring them to the table. The more ideas I have, the better my chances of finding a winner.
I like to compare innovation to baseball. People think that it’s about hitting home runs—it’s not. Innovation is about getting many base hits and occasionally hitting the home run. You very rarely win a baseball game just by hitting home runs. And the objective is to win the game.
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